Universal Music sued by its artists over downloads dosh

A class-action lawsuit by artists against the world’s largest record company has been given the green light by a judge. The dispute, which pits Universal Music against a number of its featured artists, sounds arcane – but an estimated $2bn (£1.25bn) in royalties is at stake.

Universal treats a digital download or ringtone as a sale of a sound recording rather than a licence. Sales earn the creator between 10 and 20 per cent - but the musicians argue that a licence merits more, and artists' contracts have something closer to a 50:50 split on those. A court ruled earlier this year, at a hearing brought by rapper Eminem, that an iTunes download was a licence and not a sale.

You can hear the sound of stable doors being slammed shut as executives race to change the terms for new signings to labels and closing the loophole. But that leaves several old nags wandering around, who may stand to receive an unexpected payday.

And why not? The music industry’s case for longer copyright terms for sound recordings was based on several arguments, but one that was enduring was the moral case. It goes something like this: when old music is still being enjoyed, and provides commercial value, is it fair that everyone in the value chain except the artist benefits from it? Oldies stations need the oldies. By and large, legislators found this case persuasive.